UK must follow all EU rules in ‘transition’ period

Following a meeting of the Council of the EU just before the start of this week’s talks, Mr Barnier said: “If the UK is asking for a transition period, if it’s a question of maintaining the UK’s participation in the single market and the customs union that goes with it… it’s clear that the totality of the regulations, enforcement, financial conditions, supervision… will be maintained during that period without exception.

“I should remind you that the UK knows these conditions and rules very well because it worked them out with us over the last 44 years.”

He said the EU27 will also have to decide whether or not the transition period - which would avoid a 'cliff-edge' change in the trading relationship - is in their interest. Even if there is such a period the UK would still exit in the agreed time frame - by March 29, 2019 - and would be considered a 'third country' to the EU from that point, he said.

He said there would be discussions on the transition, since the UK has asked for it, but that does not dispense with the necessity of "sufficient progress" on the other key matters which is essential to create an atmosphere of trust so as to build the future UK/EU relationship.

Mr Barnier called UK PM Theresa May’s Florence speech “constructive”, but added: “What counts now, with limited time…. is that the UK government should turn Mrs May’s declarations into precise negotiation positions.”

Speaking on behalf of the council of the EU, Estonian Europe Minister Matti Maasikas said there had been some progress in the negotiations so far but clear divergences remained in all key issues, citizens’ rights, the financial settlement and Northern Ireland. However they welcomed Mrs May’s “constructive approach” and hoped it would be reflected in the talks this week.

He said: “While we share the goal of establishing a close partnership between the EU and UK after the withdrawal, we need sufficient progress on key issues of the first phase and to provide clarity and protection to our citizens and businesses.”